Plugins allow you to extend your site by adding in additional functionality. Plugins may be designed by a third-party company and they can allow you to customise your site to match the specific requirements of your organisation.
(The video above was taken from the Plugins and Advanced Features course in the Totara Academy).
The Totara Academy has a whole course dedicated to using Plugins and Advanced Features in Totara. Here you can learn more on how to use Plugins and Advanced Features, see best practice, and give it a go yourself.